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Using Someone Else’s Credit Card Is Not Always “Access Device” Fraud, or, Why You Shouldn’t Leave Your Job If You’re Running a Fraud Scheme

Ronda Nixon’s career was on the upswing. She had logged her time as a Mary Kay Cosmetics representative. She had spent time in a job working at a small law firm – first as an assistant and then she worked her way up to bookkeeper and paralegal.

Finally, she was ready to make her move. She left her old jobs behind to go to law school. She was moving on up.

1031341_makeup_kit.jpgUnfortunately, her former boss – Garis Pruit – took ill. While he was recovering from surgery, he received a call from the bank.

His bank wanted to know why he was delinquent on his line of credit.

Mr. Pruitt thought Ms. Nixon had paid it off already.

An audit was performed. The audit found evidence that Ms. Nixon wasn’t so much paying the law firm’s bills, as she was paying her own bills with the law firm’s money.

Specifically, she had access to the firm’s American Express card.

She also had access to a Mary Kay Cosmetics credit card processing mechanism – so she could charge the firm’s Amex to her Mary Kay account and take home the money.

She also wrote herself some checks from the firm’s account. And she created a line of credit for the firm – that went to her – at the American Express Bank.

Here’s how the Sixth Circuit, in United States v. Nixon, summarized the charges:

Nixon was indicted on eleven counts of wire fraud, in violation of 18 U.S.C. § 1343 (one count for each credit card charge that ended up in her [Mary Kay] account), two counts of bank fraud, in violation of 18 U.S.C. § 1344 (one count for each of . . . two checks written from the American Express Bank line of credit), three counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A (one count for using Pruitt’s social security number and signature to set up and use the account at American Express Bank and two counts for each of the checks that she forged in Pruitt’s name), and one count of using an unauthorized access device, in violation of 18 U.S.C. § 1029(a)(2) (for charging more than $1,000 on the firm’s credit card without authorization).

The jury convicted her on every count.

On appeal, Ms. Nixon was represented by a former Bristow FellowAnnie Owens at Wilmer Hale.

Ms. Owens argued for Ms. Nixon that the access device fraud conviction was not supported by sufficient evidence to allow a jury to convict.

Access device fraud under section 1029(a)(2) requires fraud involving as access device (it’s really well named). “Access device” for these purposes, under 1029(e), means:

any access device that is lost, stolen, expired, revoked, cancelled, or obtained with intent to defraud

Thus, as the Sixth Circuit noted,

Key to the charged offense is that the intent to defraud be present both when the “access device” is obtained and when it is later used.

The Sixth Circuit concluded that the law firm Amex was not an “access device” as the term is used in the statute.

As the court of appeals said,

Here, the uncontradicted proof established that Pruitt had authorized Nixon to obtain the American Express credit card for his firm’s use. Because there was no proof at trial that Nixon had the intent to defraud Pruitt or the firm at the time she obtained the credit card (as opposed to her later unauthorized use of the card), the government did not prove an essential element of the crime.

Congratulations to Ms. Nixon who is going back for resentencing on the other 16 counts of conviction.

Congratulations too to Ms. Owens for her work on this side of the criminal defense world.